Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on BioMerieux. We currently have 10 research reports from 1 professional analysts.
bioMerieux released its Q4 17 trading results wherein sales were in line with our estimates. Revenue at CER came in at +8.9% on the back of double-digit growth in the clinical applications segment (+10.4%; accounts for c.81% of Q4 17 sales). Within the segment, the growth momentum accelerated in the molecular biology business (+40.4%; accounts for c.22% of Q4 17 sales) as an earlier start to the flu season boosted growth for FilmArray (+c.50%; particularly reagents for the respiratory panel). Sales in the microbiology business came in at +3.9% (accounts for c.40% of Q4 17 sales) as the robust demand for the BacT/ALERT blood culture line was slightly offset by modest growth in the VITEK business line. However, the immunoassays business slumped to -0.3% (accounts for c.19% of Q4 17 sales) impacted by increased competition in the US PCT space. On the other hand, the industrial applications segment surged 8.4% (accounts for c.18% of Q4 17 sales) driven by an acceleration in pharmaceutical industry sales. At the group level, reagents/services gained 11.5% (accounts for c.89% of Q4 17 sales) while instruments sales plummeted 12.1% (accounts for c.11% of Q4 17 sales). Geographically, the momentum stepped up in the Americas region (+16.6%; accounts for c.43% of Q4 17 sales) benefitting from a turnaround in the Brazilian business and strong demand for FilmArray in the US. Performance in the EMEA region was satisfactory (+4%; accounts for c.39% of Q4 17 sales) as Western Europe reported a mixed set of results (France, Spain and Germany were up while the UK and the Benelux region were slow). Sales in the Asia-Pacific region decelerated to +4.9% (accounts for c.18% of Q4 17 sales) affected by lower instrument sales in China. With the € strengthening against a number of currencies during Q4 17, bioMerieux recorded currency headwinds of €29m, lowering the total revenue to €613.8m (+3.8% yoy). For FY17, revenue at CER increased by 10.2% (vs AV’s estimate: +10.1%), slightly ahead of the target range of 9-10%. The growth was evenly balanced across reagents/services (+10%) and instruments (+11.8%). After including negative currency impact of 1.4%, the total revenue increased by 8.8% for FY17. Management has reiterated its adjusted operating profit guidance of €330-345m (FY17 results due on 28 February 2018). Note that, the change in the US tax rate will result in a non-recurring/non-cash benefit of c.€30m in FY17 (relates to deferred tax assets/liabilities with no impact on tax disbursements). For FY18, the effective tax rate would be in the 24-26% range (vs 30.8% in FY16). On the governance front, Alexandre Merieux was appointed as the Chairman and CEO of bioMerieux (effective 15 December 2017), succeeding Jean-Luc Belingard, who held the position since 2010. As a reminder, Alexandre is the son of Alain Merieux, the founder of bioMerieux and has been the Deputy CEO of the company for the last three years.
bioMerieux released its Q3 17 trading results which were ahead of our estimates (revenue at CER: +9.6% vs AV’s estimate: +7.7%) on the back of strong growth momentum in the traditional microbiology business lines. While the clinical microbiology segment (+9.7% vs AV’s estimate: +4%; accounts for c.44% of Q3 17 sales) benefited from robust performance in the VITEK product line, growth in the industrial microbiology segment (+10.6% vs AV’s estimate: +4%; accounts for c.19% of Q3 17 sales) was boosted by an acceleration in pharmaceutical industry sales. Though the molecular biology segment recorded another good quarter led by FilmArray (+29.4% vs AV’s estimate: +35%; accounts for c.17% of Q3 17 sales), there was a noticeable deceleration when compared to H1 17. Moreover, sales in the immunoassays segment were unsatisfactory (+0.9% vs AV’s estimate: +4%; accounts for c.20% of Q3 17 sales) as the good performance in the Asia-Pacific region was offset by a slowdown in instrument and reagent sales in North America. At the group level, reagents were up 8.6% (accounts for c.90% of Q3 17 sales) while instruments surged 19% (accounts for c.10% of Q3 17 sales). Geographically, the Asia-Pacific region was the key growth driver (+17.8%; accounts for c.19% of Q3 17 sales) led by robust demand in China and South-East Asia (+40% yoy). Performance in the EMEA region was satisfactory (+3.4%; accounts for c.38% of Q3 17 sales) driven by sustained demand for industrial (particularly in the UK and Germany) as well as clinical application products (in France, Italy and Switzerland). However, with difficult business conditions following cuts in some healthcare reimbursements, momentum in the Americas region lost pace (+12.3% vs H1 17: +18.7%; accounts for c.43% of Q3 17 sales). With the € strengthening against a number of currencies, notably the $, the currency benefits recorded in H1 17 (€21m) were entirely wiped out during the quarter. After taking into consideration forex headwinds (3.9%), reported revenue increased by +5.7%. For FY17, management has reiterated its revenue growth target of 9-10% (at CER). Note that in Q3 17, bioMerieux received the close-out letter from the US FDA relating to its Durham/North Carolina facility (warning letter was issued in 2012). As a reminder, the facility became fully operational in 2016.
bioMerieux released its Q2 17 results, wherein revenue was broadly in line with our estimates but profitability outperformed. Revenue at CER increased by 9.1% (vs AV’s estimate: +9.2%) led by strong growth momentum in the clinical applications segment (+11.2% vs AV’s estimate: +10.6%; accounts for c.82% of Q2 17 sales). Within the segment, the molecular biology business was once again the primary growth contributor (+40.3% vs AV’s estimate: +40%; accounts for c.18% of Q2 17 sales) driven by the fast-paced development of FilmArray in North America. Revenue in the microbiology business line came in at +5.5% (vs AV’s estimate: +4.5%; accounts for c.42% of Q2 17 sales) on the back of sustained demand in the VITEK franchise (+c.10% in H1 17) and the blood culture product line (+c.6% in Q2 17). The immunoassays business was up 4% (vs AV’s estimate: +5%; accounts for c.21% of Q2 17 sales) with VIDAS being the key growth driver (+5%; PCT up double-digit in the US). After a strong start (Q1 17: +14.5%), momentum in the industrial applications segment normalised to +6.4% (vs AV’s estimate: +5%; accounts for c.18% of Q2 17 sales) with continued demand for traditional solutions (VIDAS/GENE-UP for food industry) and alternative methods (CHEMUNEX cytometry line for pharma industry). All in all, the growth was balanced across reagents/services (+9.1%; accounts for c.90% of Q2 17 sales) and instruments (+9.2%; accounts for c.10% of Q2 17 sales). Geographically, the best performer was the Americas region (+17%; accounts for c.44% of Q2 17 sales) boosted by the success of FilmArray and robust growth in microbiology. Asia-Pacific was up 7.1% (accounts for c.18% of Q2 17 sales) led by strong demand in India (+c.20%) and China (+6%; bioMerieux’s third largest market). Growth in the EMEA region came in at +2.8% (accounts for c.38% of Q2 17 sales) as the good performances in the UK, Switzerland and the Scandinavian countries was partially offset by the slowdown in Spain and some Central European countries. For H1 17, reported revenue increased by 13.3% after taking into consideration currency tailwinds of 2% (+€21m). The underlying operating margin jumped to 15.2% (+30bp yoy) benefiting from improved product mix and a favourable currency impact. Note that, the board has approved a 3:1 stock split (payment date: 22 September 2017). Given the strong H1 17 performance and lower than expected currency headwind, management has upgraded its FY17 guidance. The company targets organic revenue growth of 9-10% (+100bp vs earlier guidance) and adjusted operating profit of €330-345m (+€30m vs earlier guidance).
bioMerieux released Q1 FY17 trading results ahead of our estimates as well as market consensus. The revenue at CER increased by 13.7% (vs AV’s estimate: +9.5%), driven by strong growth momentum in the clinical applications segment (+14.7% vs AV’s estimate: +9.7%; accounts for c.81% of Q1 17 sales). Within the segment, the key growth contributor was the molecular biology business (+43.4% vs AV’s estimate: +30%; accounts for c.21% of Q1 17 sales), led by a stellar performance in the FilmArray product line (+60% yoy). The growth momentum accelerated in the microbiology business (+8.1% vs AV’s estimate: +4.5%; Q4 16: +1%; accounts for c.40% of Q1 17 sales), on the back of higher demand for new instruments (particularly the VITEK product line). The immunoassays business remained stable (+5.9% vs AV’s estimate: +5%; accounts for c.20% of Q1 17 sales) with VIDAS being the key growth contributor (double-digit growth for VIDAS BRAHMS PCT test in the US). The industrial applications segment clocked a 14.5% revenue increase (vs AV’s estimate: +5%; accounts for c.18% of Q1 17 sales), benefiting from robust growth in the agri-food and pharmaceutical businesses. All in all, sales for reagents and services increased by 13.5% (accounts for c.91% of Q1 17 sales), whereas instruments surged by 26% (accounts for c.9% of Q1 17 sales). Geographically, the biggest beneficiary was the Americas region (+20.6% vs Q4 16: +17.5%; c.47% of Q1 17 sales), aided by a stronger and longer-lasting flu season in North America (+21.9% yoy). The momentum turned positive in the Asia-Pacific region (+17.5% vs Q4 16: -5%; accounts for c.15% of Q1 17 sales), primarily due to double-digit growth in instrument sales in China. Growth in the EMEA region remained stable (+5.4% in Q1 17 and Q4 16; accounts for c.38% of Q1 17 sales), driven by sustained growth in France, Germany and the UK. The total reported revenue was up 16.3%, reflecting a +2.6% currency effect. In April 2017, FilmArray’s respiratory panel 2 (RP2) got a CE Mark and should be commercially available in all eligible countries from June 2017. In addition, a 510(k) application has been submitted to the US FDA for the same panel. For FY17, management expects the organic revenue to increase by 8-9% and the adjusted operating income to come in at €300-315m.
bioMerieux released Q3 FY16 trading results in line with street estimates. Total revenue increased by 9.1% at CER (vs Q3 15: +8.8%), fuelled by strong growth in the clinical applications segment (+9.8% vs Q3 15: +7.9%; c.81% of Q3 16 sales). Within the segment, the growth in the molecular biology business accelerated to +48.0% (vs Q3 15: +31.7%; c.16% of Q3 16 sales), led by strong demand for instruments in the FilmArray business line (+78.0% yoy). The strong performance continued in the microbiology business (+4.2% vs Q3 15: +3.0%; c.44% of Q3 16 sales), largely driven by the sales of BacT/ALERT blood culture and the VIRTUO product line (+12.0% yoy). However, growth in the immunoassays business slowed down (+4.4% vs Q3 15: +9.0%; c.21% of Q3 16 sales), due to increased competition in the routine testing franchise. The industrial applications segment witnessed an 8.7% increase in sales (vs Q3 15: +2.4%; c.19% of Q3 16 sales), driven by the sustained demand for VIDAS and VITEK product lines by the food sector and an increase in demand for flow cytometry solutions by the pharmaceutical sector. Geographically, the biggest beneficiary was the APAC region, wherein, sales were up 11.6% (vs Q3 15: +0.6%; c.18% of Q3 16 sales), on the back of robust growth in China, India and South Korea (all up by c.15%). Revenue growth also accelerated in the LatAm region (+14.2% vs Q3 15: +10.3%; c.7% of Q3 16 sales) as the demand in Brazil and Argentina gathered pace during the period. The positive momentum continued in North America (+18.4% vs Q3 15: +18.4%; c.35% of Q3 16 sales), benefiting from the strong uptake in installations of FilmArray systems across laboratories. However, growth in the EMEA region slumped to +1.0% (vs Q3 15: +4.9%; c.40% of Q3 16 sales), primarily due to a slowdown in the Middle East, France and in certain Southern European countries. The total reported revenue grew by 6.8% (vs Q3 15: +16.1%), reflecting a -1.3% currency effect and a -0.9% scope effect. Given the strong momentum registered in 9M, management expects the lfl revenue growth for FY16 to be above the higher end of the previous guidance of 6-8% range.
Q1 sales were up 11.5% lfl (+9.1% reported), including North America (37.4% of group’s sales) growing by 24% lfl (+26.4% reported).
The contributive operating income rose 14.6% (FY15 sales +15.7%). Net income of consolidated companies decreased by 18.5%. Operating CF increased by 4%.
Q4 sales increased by 9.4% (4% lfl). FY15 sales growth was 15.7% (7.1% lfl). In the US (now accounting for 31% of bioMérieux sales), Q4 sales were up 14.6% lfl .
Q3 sales were up 16.1% (+8.8% lfl). For the first nine months, sales growth increased by 18.3% (+8.3% lfl). Q3 sales were up 18.4% lfl in the US, +10.3% in Latin America and +4.9% in Europe.
Research Tree provides access to ongoing research coverage, media content and regulatory news on BioMerieux. We currently have 10 research reports from 1 professional analysts.
We have updated forecasts ahead of tomorrow’s Capital Markets Day, which we expect to provide a comprehensive update on innovation strategy, R&D plans and commercial progress. We continue to argue that the market’s negative reaction on the Trading Update on 1st February, which highlighted FY2017 EBITDA in line with our forecast, represented an overreaction. We reiterate our Buy recommendation with a revised target price of 230p (from 250p).
Companies: Horizon Discovery Group
GSK’s Q4 results were ahead of our as well as the street expectations. Forex had a negative impact of 3ppts on sales and 4ppts on adjusted EPS. All segments outperformed sequentially, but vaccines stood out with 9% growth (vs flat Q3). The main drivers included HIV in pharma, flu and meningitis in vaccines and international markets in the consumer health business. Management maintained interest in consumer health assets but ruled out a compromise on the pharma focus.
Shire reported a solid set of numbers for Q4 and the full year 2017. Immunology drove most of the growth while neuroscience lent strong support. The guidance, understandably, was not taken positively by the market, with the company expecting the top-line to grow at mid single-digit and profits at a slower pace. While we will be tweaking our estimates to account for the softer-than-expected outlook for 2018, we do not alter our already-modest long-term estimates.
Oxford BioMedica (OXB) has announced a collaboration and licence agreement with Bioverativ to develop gene therapy products for the treatment of haemophilia. Under the terms of the agreement OXB will receive a $5m upfront payment, plus milestone payments (potentially worth in excess of $100m) and royalties on net sales of any commercialised products. This agreement further validates the value partners see in OXB’s LentiVector expertise and manufacturing capabilities. OXB now has multiple partnered products in various stages of development. Clinical progression and potential commercialisation of these could lead to substantial milestone and royalty revenues over the coming years. We place our numbers under review.
Companies: Oxford Biomedica
Deltex has announced that its French distributor, Gamida, has been awarded a new tender to supply hospitals in Paris with the Deltex CardioQ-ODM+ equipment.
Companies: Deltex Medical Group
In the February 2018 edition of the Hardman Monthly Newsletter, Nigel Hawkins addresses the issue of the UK's infrastructure expenditure, much of which is energy-related.
Companies: OPM ABZA AVO AGY APH ARBB AVCT BUR CMH CLIG COS DNL EVG GTLY GDR INL MCL MUR NSF OBT OXB PPH NIPT PHP RE/ REDX SCLP SCE SIXH TRX TON VAL
The trading statement for the year to 31 January 2018 indicated 1% growth in revenues to £8.3m, with direct-sales led markets (UK and US) offset by weaker distributor markets and the lack of revenues from China (-£0.5m). Year-end cash was in line at £3.2m. Encouraging progress seen in the US for its HUP programme and a strong pipeline of evaluations, which we expect to complete in 2018, should create a fundamentally stronger and more predictable revenue stream, eliminating the period- end loading that has historically affected the business. However, the transition to IFRS15 accounting does affect the P&L in the short term, although cash balances are expected to be higher as a result. Taking into account IFRS15 as well as FX headwinds and weaker distributor-led markets, we reduce forecasts for FY 2018. The higher quality revenue stream and ultimately earnings, however, warrants no change to target price.
Companies: Lidco Group
Following Derek Martin’s resignation as FD, Angela Hildreth (formerly UK FD of Shield Therapeutics), has joined Futura Medical in the role as FD and COO. Meanwhile we reiterate our positive stance on Futura Medical and continue to look forward to the start of the first Phase III trial for MED2002 (Eroxon®), a topical, fast-acting treatment of Erectile Dysfunction, in H1 2018, following completion of the ongoing PK trial.
Companies: Futura Medical
The AIM Healthcare index has shown positive returns in all but three out of the past 11 years (2007, 2008 and 2011), growing at a CAGR of 7.6% over the period. This compares with a CAGR of -0.3% for the broader FT AIM All Share, +0.6% for the AIM 100 and +3.5% for its more senior FT All Share Health index. Sector growth and relative performance to the AIM All Share index has accelerated over the past five years; the sector having risen 19.19% CAGR since 1 Jan 2012. This compares with 6.8% growth in the AIM All Share and 6.1% in the FT All Share. This outperformance can be attributed to the increasing success amongst the Healthcare constituents which have progressed their business plans to a point where substantial value has been/is being created and where many companies have successfully scaled their businesses to sustain future growth. We highlight four companies that have different business models but exemplify the opportunities that are increasingly becoming evident within the sector.
Companies: ABZA AKR AGY APH AGL AVCT BVXP COG CTH IHC LID MTFB ODX OPTI NIPT PRM SDI STX SNG TSTL
BCA Marketplace and stevia sweeteners developer Purecircle are the latest former AIM companies to be moving into the FTSE 250 index. The changes take place on 18 December and will take the number of former AIM companies in the FTSE 250 to 20 – although Booker and Paysafe are being taken over.
Companies: CITY TRAK bmn BXP TRCS SND
A look back at our 2017 ideas In aggregate our analyst picks outperformed the FTSE All Share last year by 9% and the cumulative performance of our portfolio over 6 years would have given a total return of 300% (almost double the return on the FTSE All Share). In addition, many of our top-down themes played out very well such as our focus on secular growth in Tech, Life Sciences, Healthcare and Financials, an increase in M&A, our cautious stance on the Consumer and especially our bet on continued strength in the Industrials last year and solid growth in the global economy. What does 2018 have in store? We continue to play ongoing secular growth themes in Tech, Life Sciences, Healthcare and Financials. In addition, we tap into domestic areas of cyclical strength such as regional construction and house building, plus self-help initiatives and potential market share gains. We maintain a favourable view of Industrials given the global economic backdrop but think this could moderate during the year. Other changes of nuance include the potential for a better H2 in the Consumer sectors, which remain under pressure for now, and a better outlook in Media from a mini-quadrennial year in 2018.
Companies: AMO AVG CBP CVSG DNLM EKF FENR IOM SAA GLE RLM SFR PGIT RLM SFR SOG VRP
The latest Office for National Statistics (ONS) survey, ‘Ownership of UK quoted shares: 2016’, shows that retail investors are more important than most company managements realise or most capital markets professionals admit. When it is also appreciated that the data shows that retail investors set the share price for most quoted companies, most days, it becomes clear that engaging with such an audience enhances a company’s standing, whilst ignoring them courts disaster.
Companies: OPM ABZA AVO AGY APH ARBB AVCT BUR CMH CLIG COS DNL EVG GDR INL MCL MUR NSF OBT ODX OXB PPH NIPT RE/ REDX SCLP SCE SIXH TRX TON VAL
Following Vectura’s recent trading and strategy update, we have updated forecasts principally to reflect lower expected R&D expenditure, partially offset in valuation terms by later expected VR315 approval and launch. We note that the stock has risen 29% since our upgrade to Buy on 10th November at 90.7p. Our revised target price of 120p (from 113p) leaves limited upside from current levels. We downgrade to Hold.
Companies: Vectura Group
Since April, our growth style screen has performed very strongly, outperforming the main small-cap index by 20pp and 24pp on an unweighted and weighted basis respectively, also comfortably outpacing microcap. In this note we provide more detail on the constituent and basket performance in the period and present the new screen constituents. As usual we focus on 10 of the current constituents, providing brief summaries and financials for clients to consider. We will refresh again in 5-6 months time and report back on performance.
Companies: SUN DOTD ERGO TEF AVG SOG IDE FEN LOOP YU/
SDI is acquiring Quantum Scientific Imaging (QSI), a manufacturer and supplier of high-performance cameras that have applications in the astronomy and life sciences fields. Considered a bolt-on acquisition, it will be incorporated into SDI’s Atik Cameras business. SDI is paying £246k ($350k) for the assets, trademarks and patents of QSI, representing prospective EV/Sales of 0.7x. The acquisition is being funded by SDI’s recently enlarged banking facility. We expect the acquisition to be 2% accretive to adjusted EPS in FY 2019. We are raising our target price by 6% to 34p, which places SDI on a CY 2018 P/E of 15.3x and EV/EBITDA of 9.7x.
Companies: Scientific Digital Imaging